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Trade4go
Jan 24th, 2025
Original content
Robusta coffee production has surged, rising from 28% of global coffee output in the 1990s to nearly 44% today, driven by Vietnam's rapid growth as a major producer. With its resilience to hotter, humid climates and diseases, Robusta is increasingly viewed as a viable alternative to Arabica, particularly as climate change threatens coffee cultivation. Although historically less favored due to perceived quality differences, ongoing efforts to improve Robusta's genetic material and processing methods have elevated its potential. Offering bold flavors and higher caffeine content, specialty Robusta is gaining traction, challenging stigma and expanding consumer choice.
Conservation International and the Green Climate Fund (GCF) announced a grant to develop the Alternative Response Options for Mitigation & Adaptation of Coffee Farms (AROMA) program, a seven-year, USD 120 million initiative aimed at transforming coffee farming practices in Mexico, Guatemala, Honduras, and Uganda. Addressing climate change impacts, the program seeks to protect smallholder livelihoods, mitigate emissions, and prevent deforestation by promoting regenerative agriculture, agroforestry, and climate-resistant crops. Representing 20% of the world’s coffee smallholders, these nations will benefit from AROMA’s alignment with the Sustainable Coffee Challenge, fostering a global shift toward sustainable coffee production for environmental and economic resilience.
Australia produces less than 0.5% of its coffee, with high land and labor costs hindering rapid growth. Despite these challenges, the country’s unique coffee flavors, like chocolate and berry notes from New South Wales and Queensland, could appeal to premium buyers. If the market prioritizes quality over price, Australian coffee may find a niche, but scaling production remains a slow process.
The Cameroon government and the Central African Forest Initiative (CAFI) have launched a USD 60 million partnership to enhance cacao and coffee production while protecting forests. The initiative aims to boost yields through the implementation of sustainable practices on existing lands, avoiding further deforestation. However, with Cameroon losing over 2 million hectares (ha) of forest since 2001, critics question if agricultural expansion can align with conservation goals. Backed by international donors, the agreement will fund projects including deforestation-free farming, agroforestry, and sustainable land management. While experts highlight cacao’s lower deforestation impact compared to palm oil, environmental groups urge stronger measures to curb forest loss, ensuring that economic growth does not come at the expense of Cameroon’s critical rainforests.
In Ecuador's Amazon region, small-scale farmers have turned sustainable coffee and cacao production into a model of economic development that respects environmental conservation. Through the PROAmazonía program, supported by the United Nations Development Programme (UNDP), local producers have embraced sustainable practices that align with the REDD+ action plan to combat climate change and deforestation. Since 2016, over 223 farmers have been trained in eco-friendly farming techniques. These efforts have led to the creation of Ecuador's first deforestation-free coffee, sold under the brand Tierra. With a premium price of USD 4 per pound (lb), this coffee, targeted for the Italian market, demonstrates how sustainable practices can boost rural economies while preserving the environment.
Tanzania is strengthening its position in the global coffee market with the establishment of a Coffee Research Centre at the Tanzania Coffee Research Institute (TACRI) and a Centre of Excellence for Coffee Production in Dodoma. These initiatives aim to improve seed production, research, and training to enhance coffee value across Africa. Tanzania also leads the call for free trade among African coffee producers, aiming to increase the value of 50% of Africa’s coffee within the next decade. The upcoming G-25 African Coffee Summit, hosted in Dar es Salaam in Feb-25, will further address the continent's underperforming coffee sector and highlight opportunities for youth employment in the industry.
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As of W3, Brazil's coffee price stood at USD 7.38 per kilogram (kg). Brazil's coffee prices have remained relatively stable in recent weeks, with a minimal week-on-week (WoW) drop of 0.27% and a slight month-on-month (MoM) decline of 4.16%. This dip follows the price surge observed in late 2024, suggesting that the market is stabilizing after a peak period. Despite this small correction, prices continue to show a strong year-on-year (YoY) increase of 26.15%, reflecting the continued high demand and market conditions. The increase in coffee prices is primarily driven by global supply constraints, including in Brazil. Severe drought conditions in coffee-growing regions have significantly impacted rainfall levels, resulting in lower coffee yields. The 2025/26 crop year is expected to see a 15% reduction in Arabica output due to unfavorable weather and damaged crops, which will likely keep coffee prices high in the coming months.
Colombia's coffee prices reached USD 7.39/kg in W3, showing slight increases of 1.79% WoW and 1.23% MoM. These rises indicate a market stabilizing after the initial dip in W1, though prices remain lower than the previous year, down 9.21% YoY. The price decline is mainly attributed to Colombia's record 2024 harvest, which saw a 23% increase in coffee production, leading to higher supply and lower prices compared to 2024. However, the strong global demand for Colombian coffee, coupled with low worldwide supply, may push prices higher in the coming months.
Vietnam's coffee prices in W3 dropped to USD 4.58/kg, reflecting a decline of 3.38% WoW and 3.78% MoM. Prices had surged in the final quarter of 2024 and at the beginning of 2025, reaching higher levels due to supply constraints in Vietnam and other coffee-producing regions. However, the easing of these constraints, with an increase in supply both in Vietnam and globally, is now starting to stabilize the market and push prices down. Despite the earlier supply challenges, the easing of the supply-demand imbalance is expected to continue, contributing to a gradual decrease in prices moving forward.
With the increasing focus on deforestation-free and climate-resilient coffee production, especially in regions like Ecuador and Cameroon, coffee producers and brands have the opportunity to adopt and promote sustainable coffee sourcing. Investing in certifications like Fair Trade, Rainforest Alliance, or launching a proprietary sustainability program can appeal to eco-conscious consumers and differentiate products in the premium market segment.
Given the rising popularity of specialty Robusta and the potential for unique flavor profiles from regions like Australia and Tanzania, roasters and distributors should explore creating premium, region-specific coffee products. With increasing consumer interest in high-quality and unique coffee experiences, brands can introduce specialty lines that emphasize local flavors or regional certifications to offer a competitive edge.
The younger population in markets like Ecuador is increasingly seeking global and healthy coffee alternatives. Coffee brands have an opportunity to position coffee as a health-conscious beverage by promoting its antioxidant properties or launching low-sugar and high-fiber coffee drinks. Additionally, companies could create coffee products that align with youth culture, like sustainable packaging or promoting eco-friendly practices, resonating well with this demographic.
Sources: Tridge, ABC AU, Conservation International, Daily News TZ, GCR, Mongabay, Vistazo
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